Turnbull’s abject capitulation to the coal lobby is now complete

The kindest thing to say about Turnbull’s absurd proposal to extend the life of the country’s oldest coal generator is that he is playing politics. There is no other reason to ask AGL to stick a bandaid on an increasingly unreliable coal generator on the basis it will lead to increased security and lower prices.

The kindest thing to say about prime minister Malcolm Turnbull’s absurd proposal to extend the life of the country’s oldest coal generator is that he is playing politics.

Certainly there is no other reason to ask that AGL Energy to stick a bandaid on what will be a 50-year-old and increasingly decrepit coal generator on the basis that it will lead to increased security and lower prices.

Not only did AGL not want it, the organisation whose job it is to keep the lights on, the Australian Energy Market Operator, made it clear it was not needed: there are smarter ways to achieve energy security.

Despite what you may read in the Murdoch media, and hear on the ABC, AEMO is not recommending that the life of existing coal generators be extended, least of all the oldest and possibly least reliable in the grid.

It’s an option, but AEMO’s clear preference is to do the one thing that the Coalition refuses to do, come up with an ambitious national plan for more renewables, embrace the modernisation of the grid and accelerate the uptake of new technologies like storage, smart software and demand management.

Pointedly, AEMO’s scenario planning made clear that with a coordinated plan to install more renewables – to a level of 45 per cent by 2030 (the level that the Coalition thinks is reckless) – would significantly reduce the risk of outages. More investment in fast responding “dispatchable” capacity would eliminate it.

In its report to government, AEMO says it is indifferent to which technology makes up the loss of large generators, but makes clear: “older baseload units are not well suited to rapidly varying energy market needs.”

Indeed, the only people who think that extending the life of Liddell might be a good idea – apart from the Tomago smelter – are the coal lobby, and the right wing of the Coalition, both of whom have lost all perspective on the issue of climate and energy.

And Turnbull – the man who would not lead a party that did not take climate change seriously, the man who spoke so enthusiastically of the “exciting” energy revolution – doesn’t have the gumption to disagree publicly with either of them.

It is increasingly obvious – even to Turnbull – that the idea of building a new coal-fired generators in Australia is about as stupid as it gets. This was reinforced by AEMO’s latest assessment of energy needs in Australia: specifically Queensland, where the Coalition wants to build a new coal-fired generator, has no need for such a proposal.

Turnbull should understand this, and his own preference may be something like Snowy Hydro 2. The AEMO reports provided him with the opportunity to seize the “innovation” he once supported; and the new technologies.

But his political needs are to appease the right wing of his party, and to do that he has to play the role of string puppet to the fossil fuel lobby, in the shape of the Minerals Council of Australia.

The best he could offer that lobby was to ask that – in the name of energy security – an increasingly unreliable generator which lost half of its capacity at the height of last summer’s heatwave, and only operated half the time during the last financial year, be kept open for another five years beyond 2022.

Liddell is probably the last thing that a market operator would want to turn to in a crisis. It is slow, unreliable and would require huge amounts of investment and no match for flexible distributed energy, and behind the meter technology that can support renewables.

It is important to note that AEMO makes it clear that there is no breach of Australia’s strict energy reliability standards by the retirement of Liddell, and any increased risk will be mitigated by more wind and solar, particularly if it comes as part of a national renewable strategy.

Indeed, under the AEMO scenarios, the only breach to standard to the NSW grid was if another big coal generator made an unexpected exit at the same time. That could happen, but not with a coordinated approach to the issue of solving the issue of dispatchable generation – and “dispatchable” does not mean baseload.

And the biggest risk to any state is the sudden failure of their biggest unit – a coal or a gas plant – and based on their performance last summer, that is a very real risk – hence the push by AEMO to get more wind and solar built, and more storage, demand management and other smart technologies in place.

As Vesey underlined, it doesn’t even make any economic sense to keep Liddell open. The cost of the refurbishments needed would be prohibitive. Bloomberg New Energy Finance suggests that the cost of wind and solar will beat refurbished coal by Liddell’s planned closure date.

By 2032, solar should beat incumbent coal. It shouldn’t be that hard to work out what the cheapest way of reducing electricity prices is. It is certainly not through new or refurbished coal plants.

The push for Liddell came on the same day as the Minerals Council produced a report arguing the very same point.

That appeared in The Australian, alongside leaked excerpts from AEMO’s special report into dispatchable energy needs that the government chose to sit on while it launched its improbable attempt to ignore AEMO’s plea to embrace 21st century technologies and flick the switch to the past.

Choosing to play politics with federal and state Labor, Turnbull, energy minister Josh Frydenberg and his predecessor Greg Hunt all issued a series of extraordinary attacks during Question Time on Tuesday, focused on Labor’s lack of enthusiasm for coal.

And they all ignored the central themes of the AEMO annual report on energy opportunities and requirement, which was being released at the very same time:

Namely that this energy revolution has to be managed by smart technologies – the system needs more wind and solar, more storage, more dispatchable and flexible generation, and more demand management and other demand-side initiatives such as energy efficiency and behind the meter solar, storage and smart controls.

What it does not need or want to do is put all its eggs in a basket called dirty and ageing coal generators. The report could not make it any clearer that the biggest risk to supplies in the coming summer and future years is the sudden loss of capacity from unreliable generators.

Liddell could not be counted on in last summer’s heat wave, and numerous other generators also failed in the heat at various times, including some of the most modern gas generators.

This is not good enough for the Far Right, with former minister Matt Canavan blaming the “green agenda” including, laughably, AGL, for the push to replace coal. Like every other policy proposed by the Coalition by the last four years, Canavan’s plan would result in a more unreliable and more expensive grid.

This, sadly, is the big dilemma for AEMO’s boss Audrey Zibelman. She is trying to devise a strategy to overcome the big risks of this summer – and the use of smart technologies like demand management, battery storage, and redesigning energy markets plays a critical role in this.

But she knows what she is up against, and that if AEMO puts a step wrong – or more blackouts and load shedding takes place over the coming months – then her ability to push the country towards a clean energy future will be threatened by the howls of the technology neanderthals.

And so many people with vested interests are not wishing her well. AEMO’s biggest challenge is going to be the sudden and often unexplained loss of capacity at critical times. Hence her push for a “strategic reserve”, which does not actually mean more diesel and gas generators, but could be battery storage and demand management.

Right now, however, all the politicians are achieving is to scare the consumer.

At the Disruption and the Energy Industry conference on Wednesday one participant said how his mother had rung to ask if she should buy a generator as back-up. Telstra’s James Gerraty lamented the political “point scoring exercise that has cost customers like us a lot of money.”

It is simply not good enough, and Turnbull has made been made to look a fool.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

53 Comments

Rob 2 years ago

Our politicians have utterly failed us on this issue. Instead of doing what is logical, rational, economically sound, and dare I say, environmentally sustainable, they have sold out to the vested interests. Screw what’s best for Australia just look after those who will keep you in power. What a disgrace!

MaxG 2 years ago

It is called political for a reason! Political is not logical, it is not reasonable, it is not economical, and is not environment and not sustainable.

AEMO recommendation: “Liddell Power Station retirement: Prior to the retirement of Liddell (announced by AGL to occur in 2022), around 1,000 MW of new investment is expected to be required to preserve reliability of supply in New South Wales (NSW) and Victoria at the NEM standard. Mechanisms should be established in the NEM design to address this, and similar requirements, for the long term.”

AEMO further explains: “As numerous reports have pointed out, the NEM is rapidly transforming from a system that was dominated by more traditional large-scale thermal and hydro resources, to one that now accommodates significant and growing numbers of variable renewable distributed energy resources, both on the grid and behind the meter.”

Turnbull’s interpretation: “OMG! New investment? Rapidly transforming? That means we gotta keep the old, decaying, unreliable inflexible Liddell power station burning fossil foolishness for another 5 years, no matter what it costs!”

Jacob 2 years ago

From reading articles on this site I would assume that the pipeline for renewable projects in those two states plus natural PV increases would easily amount to 1000MW by 2022…

Marcus L 2 years ago

NSW currently has significantly more than this in Grid connect solar applications.

trackdaze 2 years ago

There will be about 200Mw of behind the meter battery storage by the end of 2017. By 2022 it will be well over the 1000Mw.

Much better to call on that as reserve capacity than to rely on an unreliable coal plant. About 500mw went offline during the peak in february.

Joe 2 years ago

…yes ‘Intermittent Coal’ packed it in because it was too hot and NSW almost had widespread blackouts.

trackdaze 2 years ago

Turn Liddell into a solar and storage plant AGL!

Ren Stimpy 2 years ago

It’s at approximately the same latitude as the Port Augusta one so I don’t see why not.

Joe 2 years ago

Premeir Jay…way ahead the pack.

johnnewton 2 years ago

Actually some years ago it was Greens NSW policy (never happened never got voted in) in conjunction with David Mills to turn Liddell into a solar thermal with a feedin from Moree. Hazy on the details, long ago, but quite feasible. You’ll remember Dvid Mills who could get no funding in Australia and went to California

David McKay 2 years ago

Moree does have an excellent resource. We did look at a proposal to build a CSP plant there, however, that was mid 2000s & way before viable storage. I worked for David & went on the California adventure. We could build enough CSP+storage in the 5 years before Liddell closes to avoid this crazy notion of extending its life. Macgen, prior owners to AGL, were talking of 2022 Liddell closure in 2006.

Joe 2 years ago

Italiano Matty. the former Rescuers Minister, reckons buyers will be queing up to take Liddell of Andy Pandy’s hands and then wait for this, Matty reckons that ….Clean Coal can be launched !!!

trackdaze 2 years ago

Thats where you give it a quick wash before it soots up the place right?

Chris Drongers 2 years ago

Demand management or load shedding seem to be the big options this summer.

Bringing building backup generators on to support the grid would prove that a multitude of small distributed electricity sources can provide the reliability that the big generators can not provide (reduced Carnot efficiency as cooling pond temps rise, thermal stress on large substations and interconnector wires).

Can someone remind this government that for years they have denigrated and put regulatory impediments inn the way of third party aggregated and managed demand management?

Chris Fraser 2 years ago

Puppet. Lizard. Where are the conviction politicians with half a clue ?

Chris Drongers 2 years ago

Looking at the illustrations in Wednesday’s Australian captioned “Power hangs in the balance”. I think framing the argument in terms of generating capacity (MW) is wrong. Coal is great for scaling up to whatever capacity (MW) we want. But coal doesn’t run at full capacity. The capacity factor for coal plants in Australia over days and years seems to be dropping. Guessing currently closer to 50% over the whole fleet rather than 80%. Figures please.

Restating the Oz’s figure in daily or annual energy output (MWhrs) would give more recognition of the potential for variable but ‘always on’ renewables to supply Australia’s energy needs.

The arguements for keeping the lights on can then move to how storage, demand management and efficiency can use the generated electricity 24/7

Peter F 2 years ago

Don’t worry Giles it is all for show. We all know that no-one will build a new coal plant, below is my reply to David Crowe’s scare mongering in the OZ

Keep up David. It is called demand response. It is used in almost every major electricity market so they don’t need to build generators that run 2% of the time and people with CHP and backup plants can get some return on their investment. If we had the same proportion of demand response in our market as the Americans or Nordic countries have in theirs it would reduce peak demand by 3-3.5GW or the entire output of Liddell and Hazelwood

You might say it will not come cheap but it is 1/10th the price of building 3GW of coal plants or 1/3rd the price of building 3GW of gas turbines or diesel plant.

With 200MW of batteries already on order or out to tender in Victoria and SA, 275MW of new diesel/gas plants in SA and offers of 650MW into the demand response tender called earlier this year as well as upgrades to Pelican Point 240MW and re-establishment of eagle farm 350MW the despatchable capacity can be the same as it was last summer

You seem to be unaware that demand is not growing but supply is increasing

Australians are installing about 900MW per year of rooftop solar and apparently around 20,000 batteries per year. By 2022 that means we can have 5GW of extra solar and possibly 1GW of behind the meter storage, Those additional solar panels will generate about 9,000GWhr per year roughly what Liddell contributed last year and the private batteries + solar will deliver peak demand reduction of about 600-800MW. In last summers peak Liddell only delivered 1,000MW.

All of this does not include the 4GW of utility scale solar PV wind and solar thermal either completed under construction or finalising contracts, some of which will include batteries. There is far more new capacity coming on line than will be lost by closing Hazelwood and Liddell

Cooma Doug 2 years ago

Peter Well said mate. As a power industry worker I started asking questions back in 1982. Ie…Why do we respond to low frequency excursions by ramming the energy down their necks when they may not need it? Why do we spend 50% of our infrastructure money providing for the top 10% of load that can be shifted?

Back in 1982 they were my thoughts. But it got worse. Post 2000 we started building gens that cover less than 1% of the load that could he shifted. Billions spent on peaking plant that sits on the market rules with a capacity factor less than 1%. Extending old coal will prolong some serious practical needs to continue this old idea and sustain the old market rules. If we establish rules that recognise and encourage efficient modern technology there is no role for coal. The idea that we keep Liddel alive and sit there waiting for capacity short emergencies is rediculous. The idea that we stick with the old rules to encourage it to run as now is also rediculous. It doesnt fit in the new picture. Efforts to keep it going will block the cheapest most modern options.

Joe 2 years ago

Giles,….. and there they were in Federal Parliament again today ( 6/9/17 ). Big Mal and his hand puppet Joshie F. continuing the public spraying of SA, VIC, Shorten Labor and The Greens on everything connected to RE whilst at the same time playing The Boosters for keeping old Coalers going and going. Finkel’s proposed CET , The Clean Energy Target, I think now will be The Coal Energy Target.

phred01 2 years ago

Libs have been captured by Coal industry as they are major benefactors to the lib coffers. If turncoat, Barnaby,captain & Josh feel so strongly to run aging coal fired power stations beyond their use by date; let them dig into their own pockets and put the money where their mouths are!

Zvyozdochka 2 years ago

Sorry to sound like a broken record, but politics has utterly failed us. We *have* to find a way to head off to the courts on this.

There was a court case launched by ‘Urgenda’ in The Netherlands and a court ruled in 2015 that The Dutch Government had to do more to combat climate change. Not sure what the end result was as The Dutch Government had appeal rights…did they appeal, I don’t know. The point being is citizens did seek court action and won a verdict.

Jacob 2 years ago

“It is important to note that AEMO makes it clear that there is no breach of Australia’s strict renewable energy standards by the retirement of Liddell,” I think you may mean energy reliability standards?

bedlambay 2 years ago

Italian bambino, Matt Coalavan is still aggressively pushing new coal power stations. Team Turnbull has delivered an energy policy worse than the NBN fiasco.

Joe 2 years ago

Yes, Italiano Matty popped up on my TV last night…he loves Liddell but seems to have had a falling out with AGL’s CEO Andy Vessy…closing Liddell is not part of Italiano Matty’s script.

stalga 2 years ago

Caravan thinks anyone in coal should stay forever. A bit like the Mafia. Maybe his mama is from Calabria.

Forget the howls of the technology neanderthals. Stop reading Murdoch media and listening to the ABC. Let them eat their coal.

Joe 2 years ago

…and eat ‘Clean Coal’ at that, yes.

Radbug 2 years ago

Australia’s politicians will end up making the grid worthless. Because of them an enormous investment will have to be written off.

Joe 2 years ago

….my god…not another ‘stranded asset’.

Grpfast 2 years ago

I must be living in some alternative world. This is incredible that the Prime Minister of this country can be so ignorant or blatantly criminal. Giles… does anyone pay any attention to what you print? I’ve seen nothing but rubbish on TV or main stream press that’s progressed since they lambasted SA for using renewables a year ago.

Joe 2 years ago

Two Tongues Turnbull and Joshie F. give Premier Jay a public spray at every opportunity. This week in Parliament it was more of the same from Big Mal. It gives Rupert something to print in The Australian to campaign on behalf of The Libs…don’t want to focus on those dreaded Newspoll loses…19 in a row now…the magic number… 30 is within reach.

stalga 2 years ago

The Guardian website reports the truth. Many people in the comment section put up links to this site.

Miles Harding 2 years ago

I may have an answer of sorts for you on this…

Recently the ABC has been playing an inverview with the Occupy Wall St protest organiser in which he asserts that protest is ineffective and democracy is dead.

The assertion in “Capitalism is the Crisis” is that the war between capital and the people has already been won … by capital, it’s just that nobody’s realised this yet.

These two are connected; protest targets politicians, but misses the capital controlling them. Little wonder that protest is now ineffective.

That same capital also controls our politicians (at least the COALition pollies), so they are bound by their masters to promote policies that covertly serve those vested interests, not the people who elected them.

The compounding effect of the lies required to do this are making them look increasingly ridiculous.

Ken Dyer 2 years ago

Liddell is only kept open to service the Tomago Smelter. Otherwise it would have closed years ago.

Robert Comerford 2 years ago

Did I not see two companies already put their hands up to show interest in buying Liddell? Must be expecting a guaranteed profit margin from the Coalition.

Joe 2 years ago

Delta, that run the Vales Point Coaler, are apparently very interested.

David McKay 2 years ago

Problem for AGL is, they would be selling an “asset” to a competitor. Maybe they can extract a very high price. Problem for buyer is, that then makes power costly + refurb costs which need to be recovered over 5 years. New owner also assumes responsibility for huge clean up & remediation expenditure on closure. .

Joe 2 years ago

AGL’s share price is going upwards on the back of Big Mal’s recent spruiking. Another gift to AGL.

Mike Westerman 2 years ago

Giles you only have to see the obscene profits that we the consumers contribute to to understand why incumbent generators want coal power stations to stay on line as long as possible. There is not a shred of environmental conscience, not a shred of customer concern, not a shred of ethics involved – it is distilled greed. Please every Australian write to Turnbull and Frydenberg and denounce them in the strongest terms.

Joe 2 years ago

Just vote them out….a plebiscite perhaps.

Joe 2 years ago

…customer concern? We are to receive those ‘magic letters’ by Christmas and we will be getting ‘magic barcodes’ on all future invoices. What more do you what from our ….caring and sharing…. Pollies and Energy Majors?

trackdaze 2 years ago

No one will be surprised that Malcom Turnball is at a lecturn speaking at a minerals council dinner extolling the virtues of running a 50yo coal plant presently.

Use Liddell for Solar and storage AGL.

Robert Westinghouse 2 years ago

The answer is simple, scalable, cheap and delivers electricity where it is needed without the need for any change to the grid – it is: roof-top solar.

The problem the politicians want to keep Australians poor and tied to big energy. I can see no other reason for the madness. Or as Gran says, they are stupid men.

Joe 2 years ago

The surname ‘Westinghouse’…related to the fridge brand? I’ve always had a Westinghouse fridge, ever reliable.

Robert Westinghouse 2 years ago

Hi Joe – I think some distant relative had some vague connection to fridges….ha-ha

DugS 2 years ago

Pardon monsieur, did I ‘ear correct, the peasants do not have enough energie? Let them eat charbon!

stalga 2 years ago

Two years, no policy, same bullshit as Abbott. What a dog.

BushAxe 2 years ago

Wouldn’t Snowy 2.0 cover the loss of Liddell Malcolm?

Joe 2 years ago

….Snowy 2.0 will take 6 years if it gets the green light. Six years in politics…that won’t work for Two Tongued Turnbull.